Sudan's president ordered a stoppage of all South Sudan's oil exports from Sunday, accusing his neighbour of backing rebels on his territory.
President Omar Hassan al-Bashir urged youths to join the army and prepare for "holy war". He did not name the enemy but the head of Sudan's paramilitary forces said his men were ready to confront Khartoum's long-time opponent South Sudan.
The order to shut pipelines carrying oil from landlocked South Sudan through Sudan to a port on the Red Sea - the South's only route to market - came just three months after the countries ended a bitter dispute over crude.
"Tomorrow you ... will order the oil companies to close the pipeline," Bashir told Oil Minister Awad al-Jaz, standing behind him during a televised speech outside Khartoum.
Sudan and South Sudan - which split into two countries in 2011 after decades of war fuelled by oil and ethnicity - agreed in March to restart the crude flow following a 16-month shutdown triggered by an argument over transit fees and territory.
Crude had only just started to move through the pipelines in May, with the first cargoes sold last week for shipment from Port Sudan.
It can be very costly to close the pipelines, which can become blocked if the waxy oil stops halfway. The Chinese, Indian and Malaysian firms dominating the sector have been facing rising operating costs due to the shutdown since January 2012, oil sources say.
South Sudan would also have to shut down its entire oil production because it has no storage facilities.
"Sudan will not allow revenues from oil exports from South Sudan to be used to buy arms for rebels and mercenaries," Bashir said in the televised speech.
A confirmed oil stoppage would dash hopes of an economic lifeline to both underdeveloped countries. The last shutdown ravaged both their economies as oil was the main source of state revenues and the dollars needed to pay for food imports.
South Sudan had started to pump 200,000 barrels per day in April. Its output was around 300,000 bpd before the shutdown.
Waving his trademark stick, a dancing president urged youths in an agitated televised speech to join the army and paramilitary forces. "I want you all to go there," he told a cheering crowd.
Abdallah al-Jabili, head of Sudan's popular defence forces, a paramilitary unit open to volunteers, told SUNA his men were ready to "confront any attempt by South Sudan to shake up the country's stability".
Bashir, in power since 1989, has been facing small street protests over high inflation and also dissent from inside his ruling circles and the army. In November the government said it had foiled a coup attempt.
Analysts say many officers are unhappy that the army has been unable to stop the Sudanese Revolutionary Front (SRF), an alliance of rebel groups, from launching a major attack on central Sudan in April.
The insurgents, who say they want to end the dominance of Khartoum elites, briefly seized a commercial hub in the central North Kordofan state, moving the front closer to Khartoum - which they attacked in a lightning thrust in 2008.
In another embarrassment for Khartoum, a week ago the SRF attacked a convoy carrying Sudan's chief of staff just outside a town in South Kordofan state that had been declared "liberated" of rebels by the army.
Sudan's main opposition parties, although weak, have promised mass protests across Sudan to topple Bashir within three months, saying the rebellions and an economic crisis have weakened the government.
South Sudan's information minister repeated his country's longstanding denial that it backs or arms rebels bent on toppling Bashir.
"We haven't heard anything about that (the oil stoppage) yet. We had agreed that the oil would flow," Barnaba Marial Benjamin told Reuters.
He said any disputes between the neighbours should be addressed through the African Union, which brokered the March deal that allowed the oil to resume flowing.
Analysts say Juba is unlikely to be giving direct support to the insurgents, but that some officials are sympathetic to their cause as many of the insurgents sided with the south during decades of civil war.
South Sudan also accuses Khartoum of backing rebels on its territory.